Law and Order: Tax Crimes Unit
Ernie Neve, CPA
May 8, 2019
In the criminal justice system, tax-based offenses aren't considered especially heinous . . . but they still cost the government a ton of money. In field offices throughout the country, the dedicated Special Agents who investigate these expensive felonies are members of an elite squad known as IRS Criminal Investigation. (They're also the only IRS agents who get to pack heat, rock a Kevlar vest, and go undercover.) From the FY 2018 CI Annual Report, these are their stories. (Dun Dun.)
Shawanda Nevers — aka Shawanda Hawkins, Shawanda Bryant, and Shawanda Johnson — operated several businesses in New Orleans, including a sports bar and a tax-prep shop. She must have thought her taxes should be as spicy as her cooking. So she whipped up returns giving her clients fake business losses, deductions, and credits. In 2014, the IRS permanently barred her from preparing taxes. But she kept letting les bon temps rouler until CI agents busted her again, fined her $7 million, and sentenced her to seven years of bland prison chow.
Kelly Sue Reynolds worked as a bookkeeper in North Carolina. Over five years, she embezzled $439,459.97 from her employer, including the money that was supposed to pay their taxes. (That's the mark of a top-notch bookkeeper, right? They can tell you down to the penny how much they stole.) When the IRS came looking for their money, CI agents busted Reynolds' scheme. Now she's counting down two years in the "camp" where Martha Stewart served. It's been called "America's cushiest prison" . . . but Reynolds still gets to learn if orange really is the new black.
Rick Rizzollo ran a "gentleman's club" in Las Vegas, where he paid employees in cash and filed bogus employment tax returns. (He's a real gentleman himself — he hired teenage strippers, and used a baseball bat to "persuade" customers into signing fraudulent credit card charges.) In 2006, he copped to the employment tax fraud. Then he hid his money to dodge the back taxes and sent $900,000 from selling a second club to an account in the Cook Islands. But CI agents demanded the naked truth, and helped send Rizzollo to 24 months in a place where the "bouncers" don't wear tuxedos.
Lizzie Mulder (not a CPA) posed as a CPA in California, where she had clients make out checks payable to "Income Tax Payments." Perfectly kosher, right? What clients didn't know was that she had set up a phony account called (wait for it) "Income Tax Payments," under her own name. She used their money for a pricey house, cosmetic surgery, vacations, and an Arabian horse. Lizzie's husband ratted her out to clients, then CI agents joined to "stable" her in a Phoenix prison for five years.
Monsignor (!) Hien Minh Nguyen was a priest for the San Jose archdiocese and director of the local Vietnamese Catholic Center. Apparently he missed class the day they discussed that whole "poverty" thing in priest school. Nguyen stole cash donations from parishioners and deposited their checks in his personal account, among other sins. CI agents visited him, hoping for a confession, and used his lies and inconsistent answers to build a case that led to $1.9 million in restitution and three years in prison. (He can probably count on a few years in purgatory, too.)
It's sometimes fun to see what happens to people when their good judgment and common sense take early retirement. Of course we all want to pay less tax! But you don't have to risk a visit from a pistol-packing Special Agent to do it. Call us for a plan, and see how much you can save without posing for mug shots.